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Complicated relationship between EU and Nordic labour law systems

Dato:
Jun 22, 2015
|Text: Kerstin Ahlberg, editor EU & arbetsrätt

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The courts have acquired a greater role in the labour law system at the expense of politicians and the social partners. And knowing what the law actually means is becoming so difficult for employers and trade unions that the rule of law is under threat, argue the authors of a new book from the Nordic Council of Ministers.

‘Europe and the Nordic Collective Agreement Model’ is published as a
result of a project run by the Council of Nordic Trade Unions (NFS),
and the book highlights the challenges facing the Nordic labour law
systems when dealing with EU law, the EEA agreement and the European
convention on human rights.

The book’s editor, Professor Jens Kristiansen at the University of
Copenhagen, says the labour law systems in the Nordic countries are
similar in many ways. There is a high degree of organisation among both
employees and employers, collective agreements play an important part
in the labour law systems, these agreements usually completely
regulate wages and employment conditions in the trades or occupations
they cover and legislation play a limited role compared to most other
European countries. These systems are now being affected by some
developing general tendencies.

European law increasingly complex

One of these tendencies is that the legal system is becoming
increasingly complex. EU law and EEA law, interpreted by the Court of
Justice of the European Union and the EFTA Court respectively, are
complex enough. At the same time they are increasingly interacting with
the European convention on human rights, which is interpreted by a
third court; The European Court of Human Rights in
Strasbourg.

When member states gave the EU competence to adopt rules covering
labour and employment conditions, they made it very clear that pay and
industrial action should remain national issues. This means the EU
cannot introduce a directive covering pay conditions or the right to
take industrial action. But in later years we have learned that trade
union strike action can constitute an illegal restriction to the right
of establishment and the free movement of services. It also turns out
that the EU can exhort member states to reform their wage systems
within the framework of the integrated guidelines for economic and
employment policies. The fact that the Union does not have the power to
introduce a directive covering a certain issue, does not stop it from
interfering in the same issue according to treaty rules granting the
Union the power to act within other areas, Jens Kristiansen points
out.

There is also a complicated hierarchy between different types of
rules which makes it even harder to predict how far rights and
obligations go according to different labour law directives. The
directive on the posting of workers, for instance, says it is up to
member states to decide what are minimum rates of pay. But the
directive is not there only to protect posted workers and prevent
social dumping. It is also meant to promote the freedom of movement
guaranteed by the treaties. Since the EU treaties, the EEA agreement
and the EU Charter of Fundamental Rights are all ranked above
directives, it is unclear how much freedom the member states really
have. The fact that there are two different law courts does not make
things any easier. The EFTA Court and the Court of Justice of the
European Union make statements on the same issues but are not always in
agreement.

Change in balance between law and collective agreements

Another tendency is the fact that the legislator has gained a more
prominent role in relation to the social partners. The state has the
responsibility for making sure EEA law, EU law and the European
Convention are all complied with. This demands some kind of legal
framework. That is why there is no doubt that the implementation of
different EEA and EU legislation tips the balance in favour of
legislation, Jens Kristiansen thinks.

There has not been any more fundamental changes to the division of
labour between the social partners and the legislator in the Nordic
countries, however. This seems to be down to two things:

Firstly, member states have only given the EU limited powers to
adopt rules covering labour law issues. The EU cannot introduce
directives on a range of trade union and politically sensitive issues,
for instance the right of association and the right to take industrial
action, wage conditions, employment protection and occupational
pensions.

Secondly, the social partners and legislators in the Nordic
countries have obviously agreed to implement obligations under
EU/EEA-rules in a way which interferes as little as possible with the
existing division of labour. In all of the countries labour law
directives have led to more statutory provisions which cover employment
contracts, but not to comprehensive legislation on wage and employment
conditions.

A more central role for the courts

One of the most eye-catching tendencies is the fact that courts have
gained a more central role in relation to legislators and the social
partners. Courts have gained a legislative function, since they have to
interpret domestic rules in a way which is consistent with EU/EEA law
and the European Convention, while making sure national legislation is
in line with the country’s obligations according to these.

Thus the wide political room for manoeuvre usually enjoyed by the
legislator and the social partners in the Nordic countries is
circumscribed. Both domestic and European courts have decided on a wide
range of issues which in a Nordic tradition have traditionally been
considered to be purely political. This includes for instance whether
state interference in a labour conflict is an unacceptable interference
in the freedom of association, whether union-led strike action is
compatible with the freedom of movement of services and whether a legal
limit for the pensionable age can be considered to be age
discrimination.

In all three cases the legislator’s political interpretation
has been subject to the censorship of the courts, based on vaguely
formulated European legal principles.

A threat to the rule of law?

The increasingly central role of the courts has affected not only
the political room for manoeuvre, but also the employees’ and
employers’ ability to trust domestic legislation. When the courts
interpret laws and collective agreements to make sure they correlate
with the country’s European obligations, private organisations may run
the risk of having to pay for the fact that national law is not
compatible with EU law.

Kristiansen uses the Swedish Laval ruling as an example, where a
majority in the Swedish Labour Court seemed to have no qualms about
ordering the trade unions to paying considerable damages for acting in
a way which was legal according to Swedish legislation. Another example
is Danish employers who were ordered to pay damages for terminations of
employment which were legal according to Danish legislation, but in
breach of the EU law principle of equal treatment which bans age
discrimination.

This has now led to the Supreme Court of Denmark asking the EU Court
of Justice what should be given more weight — the principle of equal
treatment or the principle of the rule of law — i.e. allowing people to
know what counts. The question is written in a neutral language, for
sure, but in reality the Supreme Court thinks the EU Court of Justice
puts too little weight on the rule of law, says Jens Kristiansen.